China starts building Serbia-Hungary railway

After several years’ delay, the Chinese-backed project to build a 200km/h railway between the capital cities of Serbia and Hungary saw a ceremonial start in Serbia last week on 28 November.

Serbian Prime Minister Ana Brnabic (pictured) attended the launch of work on the first part of the line, a 34.5-km stretch between Belgrade and Stara-Pazova in Serbia, to be carried out by state- owned China Railway International, Chinese news agency Xinhua reported. Transport minister for Serbia, Zorana Mihajlovic, said the

planned railway signalled that Serbia was part of China’s ambitious trans-continental Belt and Road Initiative, said Xinhua. The first stretch from Zemun railway station near Belgrade to Stara is reported to cost $350m.

As GCRreported in February, documents seen by the Financial Times suggests that China Railway International and the Export-Import Bank of China would act as contractor and financier for the project.

But China’s involvement has held up the Hungarian half of the cross-border scheme because, as a member of the European Union, Hungary must satisfy EU rules on competitive tendering.

An EU review of the project in Hungary has held its portion back, which has sparked irritation in China.

Hungary said on 27 November it would publish a procurement tender for its section of the line, after a probe by the European Commission said the original design was not in line with EU rules, EU Observerreported.

First agreed between the three countries in 2013, the railway would allow passengers to make the 350-km- long journey between the cities of Belgrade and Budapest in under two hours, a big improvement on the current rail journey time of nine hours. Latest cost estimates of the entire railway have been reported as $3.8bn.

It has been described as the future gateway for Chinese goods into Europe from the Greek port of Piraeus. Chinese investment into Central and Eastern Europe has been increasing in recent years. On the same day as the ceremonial launch of work in Serbia, Chinese Premier Li Keqiang was meeting in Budapest with the prime ministers of both Hungary and Serbia.

Numerous investment and trade agreements were signed between China and Hungary’s Prime Minister Victor Orban, reports the Associated Press.

Orban used the occasion to assert the need for the Belgrade-Budapest railway, and for Chinese investment in general. “We would need to carry out numerous investments for which there is not enough capital in the Hungarian economy or in the European Union,” Orban said. “That is why we are financing the Budapest-Belgrade railway line with Chinese assistance.”

Image: Serbian Prime Minister Ana Brnabic speaks at the opening ceremony for the construction of the Belgrade-Stara Pazova segment of Belgrade-Budapest railway in Belgrade, Serbia on 28 November 2017 (Xinhua/Wang Huijuan)

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